It's now the end of the business day (and week, phew), and more importantly the end of the Zynga's first day on the Nasdaq. Well, how did it do? As it turns out, not so hot. When the company hit the market this morning, it was asking for an even $10 a share, but now its public stock sits at $9.50 a share, a 5 percent dip from asking price.
It turns out we were right in asking whether the Nexon initial public offering (IPO) spelled bad news for Zynga, and the MapleStory maker only suffered a 2 percent drop on its opening day. Still, the company earned $1 billion today at a $8.9 billion valuation. Because Zynga still came out on top of direct competitor EA, which is worth just $6.7 billion, many are still excited about the results of the IPO.
However, with a 5 percent loss on the first day out, it's unclear whether the CityVille maker can sustain on the market. Does this mean it can only go down from here? Not necessarily, but something drastic and inspiring would have to occur, as potential investors may already be set in their ways as to how much Zynga is worth.
Believe or not, but a lot rides on this offering beyond just a company making a lot of money. This IPO, if successful, serves to validate the business of easily-accessible, free-to-play games for a mass audience. (If not, well, the free-to-play market might start to lose its luster.) However, also if a money-maker, it could validate the worst of criticisms lobbed at social games: That only the status quo makes for a lucrative, popular--and thus an existing--social game.
What do you think of Zynga's performance on the stock market today? Do you think this means anything for the games industry?
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